Cryptocurrency: Secure vault storage in the Wild West

16 Oct 2018 08:55

With the rise in the popularity and value of cryptocurrencies around the world in recent years, G4S has developed an innovative new service offering high-security offline storage that helps to protect assets from criminals and hackers.

Once a niche dream for idealistic computer scientists, the popularity of crypto-assets has become more and more mainstream. With that growth, the value of cryptocurrencies like Bitcoin, Ethereum, XRP and Litecoin has increased at an unprecedented rate. In the space of a few years the value of a single Bitcoin has risen from $800 to over $6000. For people and companies around the world the opportunities created by this are broad, but, inevitably, so is the appeal to criminals.

Cryptocurrency trading operates like many financial markets, with buyers and sellers mediated by an exchange in the middle. The key difference is that in the absence of a central bank, the exchange can become the main repository for the digital asset, making it a potential vulnerability. Cryptocurrency exchanges are a fast-growing industry, with the largest exchanges estimated to accommodate up to $1.7 billion in trading volumes per day.

The combination of the unique requirements of exchanges and the immaturity of the sector has made them a prime target for hackers and other criminals. According to one estimate, cryptocurrency worth over $1.2 billion has been stolen since the beginning of 2017, including more than $500 million in one theft in January this year from Coincheck, one of the largest exchanges in Japan. It is therefore not surprising that there is some trepidation among major financial institutions about whether to enter the fray.

In search of safer and more robust security solutions, cryptocurrency exchanges are turning to G4S as they invest in their infrastructure. Dominic MacIver is a Senior Risk Analyst at G4S Risk Consulting: “Our clients approach us to discuss solutions to their requirements because of G4S Cash Solutions’ experience in protecting high-value items and G4S Risk Consulting’s experience in developing bespoke solutions to complex challenges. Working with our clients, we are continuously applying their expert knowledge of crypto-assets and our best practice in physical security to a sector at the cutting edge of financial technology.”

"Our security solution is built on a foundation of 'vault storage'. We not only take the assets offline, but break them up into fragments that are independently without value and store them securely in our high security vaults, out of reach of cyber criminals and armed robbers alike.”

Dominic MacIver
Senior Risk Analyst at G4S Risk Consulting

G4S Cash Solutions is a global expert in payments and has carried out extensive research to understand the trends and differences in how people around the world pay. In April, G4S published the first ever World Cash Report, which highlighted that despite the global rise in card, digital and mobile transactions, cash use is still growing and it remains hugely important and widely used by people on all continents.

There is no greater contrast in the financial world than between conventional cash, which has been used and trusted by cultures across the world for thousands of years, and cryptocurrencies, which have only existed since 2008.

“The original goal of cryptocurrencies was to redesign the fundamental architecture of money” Dominic explained. “Although some early adopters have made enormous returns, the sector has attracted the same old threats for financial systems, including robbers, scammers, market manipulators and many others. Our innovative security solution helps protect against some of those threats by taking the assets offline and storing them in high-security vaults. This gives people and businesses peace of mind to trust that their crypto-assets are secure.”

G4S Risk Consulting advises customers on threat identification and risk mitigation. This includes assessing vulnerabilities to customers’ assets and working practices to identify where they could be exposed to additional risks, such as through armed attacks, and advising on how to address and reduce those risks and vulnerabilities.

There are a number of ways that people and businesses currently store crypto-assets. Online wallets have been a popular choice for many, but these are still vulnerable to theft, as they are only as secure as your computers are from hackers.

“Offline storage has become a more established and secure way of storing crypto-assets" said Dominic. "At the same time, violent robberies and kidnappings in recent years have shown that the sector is still exposed to conventional criminal threats. In collaboration with our client, our security solution is built on a foundation of 'vault storage'. We not only take the assets offline, but break them up into fragments that are independently without value and store them securely in our high security vaults, out of reach of cyber criminals and armed robbers alike”.

“Access to these sites is heavily restricted with multiple layers of security and robust protocols, and only when all the fragments are combined with specific technology can they unlock access to the value stored within.”

“It has been a justified cliche to describe the cryptocurrency space as a Wild West. Working with our clients, our innovative vault storage concept offers the highest protection to keep people and their assets secure and bring order to the frontier.”

About G4S

G4S is the leading global, integrated security company, specialising in the provision of security services and solutions to customers. Our mission is to create material, sustainable value for our customers and shareholders by being the supply partner of choice in all our markets.

G4S is quoted on the London Stock Exchange and has a secondary stock exchange listing in Copenhagen. G4S is active in around 90 countries and has over 560,000 employees. For more information on G4S, visit www.g4s.com.